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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a two-decade holding period for an investor who was considering Amazon.com Inc (NASD: AMZN) back in 2004, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 05/17/2004
$10,000

05/17/2004
$890,933

05/14/2024
End date: 05/14/2024
Start price/share: $2.10
End price/share: $187.07
Starting shares: 4,761.90
Ending shares: 4,761.90
Dividends reinvested/share: $0.00
Total return: 8,808.10%
Average annual return: 25.16%
Starting investment: $10,000.00
Ending investment: $890,933.21

As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 25.16%. This would have turned a $10K investment made 20 years ago into $890,933.21 today (as of 05/14/2024). On a total return basis, that’s a result of 8,808.10% (something to think about: how might AMZN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“I’d like to live as a poor man with lots of money.” — Pablo Picasso